so we have a great number. and what we're doing is basically repealing the decline, so to speak. let's not get carried away. but next week, we've got big earnings. toll brothers, pvh on tuesday, these will be the tale of the tape. there's always a bull market we had a strong jobs report today. then we had a big stock rally. so good news is good news and i don't see why the fed can't slow down the bond purchases by $15 billion. maybe enhance their credibility. but the bad news for obama care is rolling in. the website is posting an abysmal failure rate when it comes to reporting enrollment and payments to insurance companies. it's still at a very high 10% and was just recently at an alarming 25% and you know what? it ought to be zero. and speaking of insurance companies are they getting

bailed out like the banks? it sure looks like it. 65% of americans by the way are totally opposed to it. all those stories, much more coming up on "the kudlow report" beginning right now. good news is good news today. big jobs, big stock rallies. we have all the details. good evening. >> larry, plenty expecting a non-farm payroll report, but no one predicted the markets would react this week. there was worries that an improving economy would lead the fed to taper early, burr the stock market rallies big and the bond market barely moves. cyclical sectors were strong and even the interest rate sensitive groups had a good day. we closed at the highs.

but what about the taper fears? remember bond yields had moved up from 2.5% at the end of october to about 2.9% today. most traders haven't changed their position, that tapering is unlikely to start before january at the earliest and it will be gentle when it starts. finally, janet yellen will believe to enforce that tapering is not tapering, like changing the unemployment threshold they have been talking about. larry, back to you. all right, many thanks to bob pisani. now, it looks like more and more like obama care is failing so badly that a bailout is already in the works for the nation's biggest health insurance companies. and that's because of what many are calling the perfect storm. not enough young people enrolling, too many older and sicker people signing up, also there are too many errors in the

reporting back end of the health care.gov website. and today, they admitted to the appallingly big error rate. and 65% oppose a rescue for the health insurance industry. you know what, folks. one big bank bailout five yearers ago more than enough, thanks very much. here is independent senior policy analyst hadley heath and with us democratic strategist tracy sefl, lenwood brooks, policy director for public notice and cnbc contributor james pethokoukis of the american enterprise institute. good evening. heather, let me -- let me begin with you. what is up with this? what are they calling it? a corridor. they're calling it a corridor of assistance for the insurance companies. it sounds like a bailout to me.

i don't like it one bit. you tell me what's going on here. >> well, the most recent proposed change goes back to those cancelled plans, larry, when the administration announced the fix for the plan cancellations that many states have adopted. that means they can be back on the market for another year. that means the enrollees are not entering the obama carriesing pools and there are fears that the pool will be much less healthy than expected. the change is now for the federal government to open wider that spigot of payouts in reinsurance program that is supposed to last through 2016. >> we have known this. what's new is the switcheroo from the president. i get that. but i don't think, you know, i don't think people really knew going back that in the fine print of this bill was essentially a three-year potential rescue of the insurance companies. if they don't get enough revenues and they have too many claims. i mean, what do you expect?

if you have a special spot for processing the sick and the elderly god bless them. i'm saying you should have known that this was going to come. and the polls have said the young people don't want this thing. i don't think people knew, hadley, that this was in there. and now it's being accelerated. in fact, they're loosening up some of the regulations so that the money can be channeled into insurance companies fast. why is that not a bailout, reminiscent of a bank bailout? >> people supported obama care because they believed it was a safety net program and now we're finding out it's a safety net program for the insurance companies. corporate welfare for the insurance companies. so that's a disappointment to people who didn't understand this three-year program and others were going to be essentially payouts to the insurance industry, but agreed to go along with the regulations hoping to get new customers. and now insurance companies find themselves essentially the marionettes of the obama care.

>> jimmy p, i have no brief against the insurance companies, but tell me what's going on here. do i have this story wrong? >> listen, the point was supposed to be that insurance companies would subsidize those companies that had really bad risk pools. all right, so this is going to be budget neutral. not involved with tax payers. what they did not anticipate was that wasn't going on the an isolated problem, but an industry wide problem so then who comes in? the government. i'm sorry did i say if government? i mean the taxpayer. it's a bailout to make sure they don't leave the program after 2014. if they flee the program, the whole edifice begins to collapse. absolutely a bailout. >> as of monday, a good report

from "the new york times" and others, as of monday, they're lowering the so-called individual threshold. it used to be $60,000 losses and then the government would help them out and now it's only $45,000. the enrollment is not going to favor the young people. this is a democratic thing. why are you democrats always in bed with the big corporations and this crony capitalism around the big trade you know on the labor? why can't you play it straight? >> and this is the same argument we're having over in the budget world where we don't want to close corporate tax loopholes? >> i want to close corporate tax loopholes. i want a lower marginal tax rate on the other side. stay on topic. i want to know why this bill was written in such a way as to essentially bail out the insurance company. you know what? i'm going to bet that not 3% of the voting population of this country knew that that provision was in the bill much less triggering it in the earliest days. >> well, there's several things here. and i'm glad jim mentioned the budget neutral element that the cbo has ascribed to this because

that's a significant -- that's real. so when we talk about the risk corridor and bailout i think can be so -- it can be used in a lazy way. and this is an example of that. it's not a bailout it's a safeguard. there's -- there's protections in place for businesses to -- they're going to benefit in a way that allows them to guess what? hire more workers. >> right. wait a second. >> larry, it's stimulus. i -- the novelty of the argument. >> look, the insurance companies were all for this bill from day one. so were the drug companies, so were a whole bunch, why? because they saw a whole lot of new customers. fine, i'm in favor of new customers and profitability. but i'm not favor of the federal government coming in to cash them out of the difficult situations where the claims may be much greater than they thought, because of this whole business about pre-existing conditions.

which was obama's original hypothesis for this whole thing. if they're not making enough money, then they're not making enough money. they have to pull out. why do we have the taxpayer have to bail them out? >> insurance is about the law of large numbers. you have to spread risk over space and time. and what's happening here is so few people are enrolling right now you can't spread that risk and if the young people do not enroll, it doesn't work with the cost. so that's the real issue here. >> hadley, you know, let's not forget also that this is not the only payment from the federal government. right? there's subsidies to make it more attractive to buy these insurance packages. okay. and those subsidies run through the insurance companies. so they're going to get a little vigorous out of this before it's said and done. why are we singling out and helping so much this industry? >> you know, it's interesting. president obama was against the individual mandate before he was for it. >> right. >> many supporters of the affordable care act thought of

insurance companies as the big bad villains in our health system before they're now in favor of supporting them or propping them up through these risk corridor payments and the subsidies in the exchanges. it's an interesting turn of events. >> jimmy p, a lot of insurance companies are pulling out of the markets. probably the sensible thing to do. >> that's the point. listen, this was supposed to be as we said budget neutral. because they didn't expect it to be that much. a company here or there, no it's throughout the entire system. that's whey -- i don't know what it's going to be $500 million, a billion. we're talking about trillions of dollars but that's a trillion dollar subsidy. what is this, it's a bribe to keep them from leaving the program. if they leave the program, see, there is no program. >> the trouble with this story is that obama care may go down before it even starts up. i think that's the issue. i think that's why they're rushing this past week the obama cons to open up the regulations and to lower the thresholds so

they can start putting money into the insurance companies. because we know, we know that the youth, young people are not going to sign up in droves. they're going to get far less than that. therefore, we have a problem right from the get go. >> we don't know where that's going to go, but we do think it's going to go up. let me -- >> which is going to go up? >> we seal the young people numbers go up. >> really? we had four college kids on the program last night. i didn't hear that. >> well, the world hasn't ended despite the broken website. let's remember one thing, you mentioned rushing things. let's do the opposite. go back ten years, 2003. the republicans did what? they voted for a risk corridor in president bush's medicare prescription drug plan. this is not -- >> i wasn't in favor of that. see, that argument doesn't hold water with me. >> 200 plus -- >> i'm going to call their butts out on that too. >> 40 plus -- >> i'm opposed to crony capitalism. i don't care which political party. lenwood, let me finish with you. if the public gets this story,

now we are using a story that was on the front page of investors business daily. a great newspaper with only 300,000 or so circulation. i'm going to predict, i want your final thought on this, if these stories get out, the su subsidies and the bailouts, i think all hell is going to break loose. the public polling, they don't want to go through another bank bailout. >> no question about it, larry, and that's the real concern here. americans are going to be outraged when they find out that so many of these things in obama care are covered by subsidies and that's wrong. >> including saving the companies. >> that's right. >> including saving -- >> the private marketplace but it's really not. it's subsidized so much. >> how about law firms next? all the popular companies. >> everyone knows that the insurance companies also pay back to the government. >> we don't know that. >> no -- >> they're not paying back that

billion dollars. >> that's right. >> there are who visiprovisions >> no, it's because companies, but it's too bad. so that is going to -- taxpayers. >> you'll have another whack at the ball. jimmy, tracy, lenwood is going to stick around with us. now let's get back to the big jobs report that set off even bigger stock rally today. we'll debate those jobs' numbers and the economy just ahead. later on, the republican party chairman says obama care was designed to quote, screw over young people. end quote. his phrase, not mine. we'll going to have to cover that story as well. and don't forget, free market free market capitalism is the best path to prosperity. bailing out banks or insurance companies is not. i'm kudlow, we'll be right back. i love having a free checked bag

with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪

now, another solid jobs report, so is this the start of the new economic upside surprise? the labor department announced u.s. payrolls jumped by 203,000 in november. the department also revised down the two prior months and the

unemployment rate dropped to 7%. here is former labor secretary robert reich and jimmy pethokoukis is still with us. robert reich, good to see you. as a former labor secretary, what do you think? i mean, this is a pretty good number and actually the trend lines are pretty good. >> yeah. the numbers are good. the trend lines are good. i think a lot of people are breathing a sigh of relief, particularly in the white house. it looks like the recovery has some legs. but let's not declare victory yet. we have some false dawns before. and what worries me i'll tell you, you know, the average over the last six months is only about 180,000. new jobs. which is actually less than last year. last year's average was 183,000. and most of what we know about the third quarter is not all that encouraging. consumer spending, inventory's up. there's -- this is still a very fragile recovery. >> all right. fair enough. but jim pethokoukis, democrats

in congress are clamoring for another extension of unemployment insurance. and some of their allies also want to quote, raise the minimum wage, as they want to boost it artificially which never works. if things are getting better, why do we need all of these additional costly safety net issues? >> first, let me say i missed the jobs number by 1,000. i'm not getting credit on wall street. i missed it by 1,000. you know what, i could have got it exact, but i didn't want it to look like i knew it before. it is getting better. unemployment rate is dropping. 200,000 jobs. that's okay. does that mean we should raise the minimum wage, lower the minimum wage? the economy is only growing about 2%. we still have a huge jobs gap to where the number of jobs we should have if we would have had a normal recovery and why would we want to make it more

expensive to hire the very people, low-skilled people, young people, who have the highest unemployment rates. listen, if you have a college degree or graduate degree, listen, that unemployment rate is about 3.5%. if you have a high school degree, it's like a depression. >> people are lucky to have a job particularly at the lower end. gives them a start. get on the bottom rung of the ladder and if they work at it, get their discipline they can climb the ladder of success that's the american way. if you start raising the price of labor as -- the minimum wage and i'll include unemployment insurance, then you're kind of gumming up the whole works. >> there's the argument against it. but the argument for it, unlike 20 years ago when most minimum wage workers were teenagers, most today are bringing home more than half of their family income. they are adults and the minimum wage is 30% below in real terms

what it was in late 1960s. so there's a very strong argument for raising it and it helps on aggregate demand. people who have money in their pockets they turn around and buy stuff in their neighborhoods and communities and that helps increase -- >> i think we can agree it would be much better right now, we'd get more jobs if the economy was growing 3%, 4%. did you hear anything, larry, in the president's inequality speech that it would juice it up 4%? >> no. i went through it. i wrote a column about it. for heaven's sake, maybe needs a new speechwriter. probably needs a new policy. same old stuff. raise the minimum wage. have more shovel ready infrastructure. go and highlight -- go after wealthy people who succeeded. even quoted the pope regrettably who i guess is anticapitalist too. this stuff is not going to work. you want -- let me put it to you this way. raise the minimum wage, the government is deck dating the

corporation. why is that? the company has to eat it, bob reich. if they eat it, their profits are going to go down. >> we could have the age old discussion about whether you want minimum wage at all. but if we have a minimum wage, and given how far it's dropped over the last 30 yearers, in terms of unemployment insurance, you have a record level of long-term unemployed and they frankly need unemployment insurance and if they have more money inna their pockets they tn around around buy more. >> they're stuck in -- 4 million long term unemployed. how about for those people i would lower the minimum wage. if you're a long-term unemployed, it would make it less expensive for business to hire those people, not more. >> look, maybe the government should subsidize them. if that's what the country decides let the taxpayer -- >> and the earned income tax credit. >> larry and jimmy, the earned income tax credit also needs to

be expanded. this is a very important, the largest antipoverty policy we have. >> okay. >> what about this, i wrote about this in "the new york times" the other day. absolutely. >> look, see, my biggest problem -- i am not in favor of more government subsidies. i think we have enough subsidies. but my biggest problem, robert reich, i don't like the government dictating to private corporations, shareholder corporations or private companies altogether. i think that's wrong. they pay what they can afford to pay. if the government and the voters want to put some more money -- >> so larry, you don't believe there should be a minimum wage at all? >> i would not. i'd rather do a negative income tax -- >> how about minimum safety standards, how about any minimum standards at all? >> listen -- >> you want no wages and no fedex guys back to minimum wage. >> you know, larry back to social darwinism. >> no, i'm better at health

regulations. i don't like economic regulations. great to see you. >> jimmy, you're right on the earn income tax credit. >> jimmy pethokoukis will come back later on in the show. funeral services for nelson mandela are still in the planning statemeges. we'll have a report just ahead. please stay with us. [ female announcer ] thanks for financing my first car.

thanks for giving me your smile.

thanks for inspiring me. thanks for showing me my potential. for teaching me not to take life so seriously. thanks for loving me and being my best friend. don't forget to thank those who helped you take charge of your future and got you where you are today. the boss of your life. the chief life officer. ♪

south africa is now preparing for a massive influx of world leaders and celebrities as its plans for nelson mandela's memorial services. nbc's richard engel is in south africa with much more. good evening, richard. >> larry, there's now a wall of flowers and tributes and letters in front of the home where mandela died about 24 hours ago. today, mostly we saw celebrations here. some people did come out to mourn, but mostly they were singing and dancing and reading poetry. after all, mandela died at the age of 95. he was surrounded by family. people sailed they owed a debt of gratitude to the person who ended apartheid and saw reconciliation here. if there had not been a mandela, if there had not been someone who was willing to forgive his oppressors, this country still could see a great deal of racial

violence. perhaps even a civil war. now, there is still a long way to go. this country has problems. mandela's legacy has not been completely met. crime is a major problem. a lot of the houses in this area are surrounded by high walls and electric fences. there is also poverty in this country. and even after all that happened and all that mandela did to bring communities together in this country, many blacks and whites, still live very segregated lives. larry? >> all right. many thanks, nbc's richard engel. most of the news reports say democratic and republican negotiators are very close to a budget deal on capitol hill. but i'm hearing that there are some significant differences between the two parties and inside the gop. we're going to get the latest from washington on all that next up on "kudlow." the american dream is of a better future,

a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪

♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ [ male announcer ] the beautifully practical and practically beautiful cadillac srx. get the best offers of the season now. lease this 2014 srx for around $349 a month. during the season's best event from cadillac. ♪

news reports suggest house and senate budget negotiations are inching their way towards a deal before next week's budget deadline. but i want to ask our own cnbc's chief washington correspondent john harwood if that is indeed the case. john, good evening. i'm hearing from some sources that there's still some significant spending and revenue differences. what can you tell us? >> well, they're inching closer

to a deal, but not there yet. there's a reason they didn't announce the deal before the house of representatives left this weekend. from what i am understand -- given to understand by both parties, we're looking at a probable $90 billion deal that if it's struck and passed by the house and senate next weeks would in fact reduce the risk of a government shutdown in january. but it would provide little long-term deficit reduction and there remains a sticking point over unemployment benefits and republicans don't believe the democrats are entirely serious about that. it's come up late in the process. not sure if the white house is going to insist on that happening. another potential sticking point may be whether or not there's any long term deficit reduction in the deal if they just raised the sequester caps and substitute one set of cuts for the other, there wouldn't be deficit reduction. there's some talk that the revenue components would be dedicated to deficit reduction.

but we have to wait and see happens next week. this congress is unpredictable. >> house defense chairman buck mccann, he wants $20 billion more, because defense gets killed in the sequestration. he has defense hawks that will vote against it if they don't get their $20 billion and that means john boehner doesn't have 218 votes. >> he may not have 218 votes, but look, any accommodation you make like that from -- to assist the defense is going to squeeze the other end of the balloon which is domestic. you are going to need votes in order to pass this. you have to get it through the senate. it is austan goolsbee, the former chief economic adviser to the president called the emerging deal not even a baby deal. he called it an embryonic stem cell sized deal, but we don't know for sure that this congress can get that done. >> i heard that too. and also, john, last up, there's

a whole bunch of discussions about revenues going on which makes a lot of republicans unhappy. but co-pay for federal employee pension funds is one of the big sticking points. apparently over ten years worth $130 billion. democrats hate it. republicans want it. is that going to get in the way? >> you're going to have democrats who don't like it, but i believe that will be part of the deal. if you're not going to touch medicare and social security, this deal doesn't touch the two programs. it also isn't going to raise any taxes. if you avoid the hot buttons you have to get the money some place and the fees they'll get the money from are aviation fees. some people may call those a tax. and the amount -- kind of entitlement cuts would be from federal retirement and if you're stepny hoyer, you're not doing to like that. but to get to 218 people are going to have to take votes they don't like. >> and selling the spectrum rights. we have been trying to sell the spectrum rights since you and i

were kids. they never get it done. here it pops up again. >> the bag of tricks is finite. but they're going to reach in and scrounge for everything they can. all right. many thanks to john harwood. selling the spectrum rights. always in deals that never get to be deals. i still believe there are significant differences between the two parties and also inside the republican party in the house. so let's talk. here now is former cbo director who is now the president of the american action forum. tracy self and lenwood brooks and james pethokoukis are also with us. a simple question. if you do nothing here, the law is the sequester and the budget caps. that's the law. so why do the republicans feel compelled to make some kind of deal that will loosen up these spending restraints which i regard as a good thing? >> it's because of the policy. you mentioned the defense hawks, the reality is that the

sequester would cut $19 billion out of defense and then turn around and put $23 billion back in over the next two years. you're doing a u-turn where you started. in the meantime, you hurt readiness. it doesn't make policy sense. the goal is smooth that out and change the focus from those accounts to where the real money is. the mandatory spending programs, get a net deficit reduction package. if they can get that's a good deal. >> but they can't. of course you're right about the defense and buck mccann is right. if you look at the line, if you look at the base line, they're up 19% over the next bunch of years out the 2021 or something. 2014 they take another hit. i get that. however from that base it rises about 18 or 19%. that's pretty good. >> the other argument for getting the deal is that these discretionary cuts are written on paper. every congress can undo them. if you start changing the

federal retirement program, it sticks. if you start changing aviation fees it sticks. if you change the mandatory programs like farm or spectrum rights they stick. you change the long term as well as the short term. it's worth trying to get a deal. not every deal is acceptable. the parties are very far apart on the big items. so if there's a small deal where you can get enough overlap and get each side to take some bad votes it's worth trying to get it done. >> let me go back to you on this point. i am so totally in favor of the budget caps. i know they're not perfect. i do get that. i think too much is being taken out of defense. >> absolutely. >> but nonetheless i'm in favor. the minute you start fiddling with the caps, the minute you take the sequester off the books you're finished. for mr. obama and his cronies, the era of big government spending ended in 2011 with the

budget caps and subsequently the sequester. i don't want to reopen that era. >> we shouldn't just like we shouldn't have to go back, let the other side -- go back to obama care because it's the law. well, sequester spending caps which are batipartisan, are the law. they were passed in 2011, it's a small step in the right direction. but they should not larry get rid of the cuts today. keep the ones out years down the road and do tweaking of new revenue and say, let's keep spending. it looks like we're headed that way. >> democrats want revenues. basically the position of the president and he gave this speech earlier this week, they want to get rid of sequester. they want to close so-called corporate loopholes without lowering marginal tax rates so they want to tax and spend. if i were the republicans i

would do nothing. let the sequester happen. >> what are we on now, three years of rollicking with our fiscal policy. it's interesting just how mum everyone's been as this week wrapped up. so we'll see what happens in the coming days, but it's notable that there isn't a whole lot of speculation. i certainly -- i heard loud and clear what john just said. but beyond that, we don't know. >> well, i think there's no appetite for a shutdown. i agree. but jimmy, i don't know, i'm not sure i really understand the politics here from the republicans side. talk to me. talk to me about this because they have the hand. they hold the ace of the gop. why do they have to mess around with this kind of package? >> since 2009, two amazing things have happened. one, somehow we got almost all of the bush tax cuts extended. that's pretty good and somehow we have had to back-to-back years with the declining

spending that's the first time that happened since the korean war. >> which the president talks about. >> that's right. >> try to reverse it as soon as possible. listen, listen, i understand the defense amendment, but i think you're right. if you break the sequester it will not be the last time. it's never just one cockroach, there are a whole bunch. >> you're right. >> let me just -- three points. >> no. >> number one, number one, they do have a very strong hand. so that means they don't have to take a deal. >> right. >> why not try to get one? number two, this is a great lesson in how real leadership and deals are done. paul ryan and patty murray are grown-ups. they don't agree on everything. they're not out finger points or blaming. they're trying to do something constructive. i think the president ought to

watch this. if you get -- no, it's not big in that way, if they get something and we can get passed funding the government debt ceiling without the democrats shooting themselves in the foot -- >> that's the best victory. >> i was told the sequester and the budget caps were going to destroy the economy. remember that? >> they closed -- >> and the cbo told us it was going to destroy the economy. where are we now? after a year of the sequester, 11 months the unemployment rate has come down from close to 8% to 7%. now, the economy is performing as sub par. it ought to be growing twice as fast, but it's growing. and i think smaller government gives the private sector openings to grow. let's them breathe. >> the economy didn't collapse in the shutdown. >> all the keynesians predicted gloom and doom and nothing happened. >> and the sequester only amounted to 3 cents on the

dollar of total federal funding. it wasn't that much. i think we should cut more, but we have to make the hard choices and look at the mandatory spending. we're out of the easy cuts at this point. >> now, let -- tracy, here's the point. there's two numbers. i want to put them on the table. $967 billion. that's the republican sequester number. that's the sequester. that says for the coming budget year, the level of appropriations, not entitlements is 967. the democratic number is 1.58 trillion. if you split the difference you get 1 trillion. that's what i'm reading about in the newspaper but they don't want to split the difference. they want to take more spending and get more revenues that's where the things would break down. i would say with the 967. i wouldn't move an inch. not an inch. >> okay. let's see where we're going to go with this. i think it's notable that

there's so much agreement around this table and with your other guests that the defense sequester cuts are terrible things and we gloss over that and move on. >> you want to cut defense more? >> well, i think we're talking about implications to national security, all of the economic hardships. we can't just keep glossing over in particular with the defense sequester cuts. >> but that whole thing -- i agree with that. to your whole other point, i love leadership. if you're running the office of management and budget that would be great. if you had two republican houses to work with, doug -- >> how far does your endorsement get me? >> probably going to hurt you. i basically think -- but doug, it's a split situation. you know that. and you know that these things do not turn out well. and as you said and jimmy and the others said, current law says keep the budget caps and the sequester. $967 billion for appropriations, discretionary. i'm fine with that with for

another year. i think that helps the aeconomy. i'll give you the last word. >> paul ryan doesn't have to make a deal. but i think it's worth exploring it. if you can get less spending overall and save better defense policy, why not? it's worth looking into. >> but he has the cards. he holds the trump cards. >> absolutely. yeah. the default is a good outcome. >> right. >> can he improve on it, maybe. he doesn't have to. >> we have to jump. thank you very much. appreciate it. rest of our panel has much more work to do now. how about that rally on wall street today? well, maybe, just maybe those trade earns finally decided to take good news as good news. we'll talk about your money with our expert investors next up. please stay with us. clients are always learning more

to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates.

he loves me. he loves me not. he loves me. he loves me not. ♪ he loves me! that's right. [ mom ] warm and flaky in 15, everyone loves pillsbury grands! [ girl ] make dinner pop! huge rally on wall street. dow up big today, gaining almost 200 points and the ten year bond yield sitting at 2.8% or thereabouts. so is good news finally good news? stocks embraced it.

we have kent polcari. and okay, i read your cards. you're a raging bull. let's hear it. >> we have been talking about this. i do think that 2014 is going to be better year, right? i think we are starting to make some progress. it's been frustrating over the last couple of weeks with the mixed macro data reports. some good, some bad, causing some angst and frustration. but net net a report like today shows consistent movement. >> when you said 2014 is going to be a better year, s&p is up 27% so far. >> yeah. >> all right, we have a couple of weeks go. you think 2014 and the s&p will exceed that -- >> i don't think it will exceed 27%, but i think it will be a good year here and around the world. i think europe is going to come on strong. i think europe has bottomed out and is starting to move. a lot of opportunity in europe. >> warren, let me ask you, to me as the economic stats came in all week so that we have the argument about whether the federal reserve is going to slow down the bond purchases or not,

i think it's virtually inevitable whether it's next week or ten days or january, they are going to taper down the bond purchase. to two ways about it. with today's stock market rally is the market ingesting and digesting that and if the economy is okay, we don't care if they quit buying bonds? >> i think you have seen the transition in particular with the fed, president, all coming out and even yellen during testimony preparing the world for the tape theirr that's comi. that's already starting to be baked into the stock market. >> so the stock market went down, but today is a big day. was it the jobs number today or -- >> i think it was a combination of things. one, the jobs number since that's a big focus of what the fed looks at. it was a solid number. continuing solid number on a couple of months now. i think that that possible trend upward is giving everyone

confidence that the economy is on better footing than maybe they believed it was. that's number one. then number two, i know you have discounted this earlier in your segment, but the news out of washington is that maybe they're little closer to a deal. i think those combined really purposes -- >> one can always hope that they are close to a deal, but they're all dopey dopes and you can't be sure. >> then you'll get another surge in the market. >> nobody looks at this, but the third quarter gdp revision was up to 3.6%. inside that number were humongous profits. profits, the mother's milk of stocks, okay? gdp profits are internal revenue service measured profit. you can't cheat or fiddle with it. domestic nonfinancial profits. domestic nonfinancial profits, up 8.5%. year on year. that is a big number. and were an all-time high for

profits, $2.1 trillion. now, that to me is bullish. even though i don't hear anyone talking about it. >> no, i think it's bullish and i think it's interesting no one is talking about it. those are the kind of stats -- >> big numbers. >> that people need to hear. all you hear about is the negative stuff that people are fooling around with. some of the earnings. >> they come out late, but these are huge numbers. $2.1 trillion. as i said, these are irs taxing profits. you can't fiddle with it the way you can with some of the s&p. >> that's goes to the justification about the economy turning around. >> that goes to job creation. when corporate ceo's says we're on solid footing, we can hire more people. >> we had a report from bob pisani, to you buy the cyclicals or what? >> i have been looking at the financials and i think there's a

lot of room to go higher. even though they have acted pretty well. interesting today a few names that didn't perform too well were some of the high end retailers. they missed the boat today. >> sears got killed. j.c. penney got killed. even urban outfitter. >> some have been warning about this shopping season not being that strong. so they're warning. so i think only is of the -- >> stay away from the retailers? >> until after you get through the season. >> and then actually, it's a very nice play. >> can i ask you one thing that's quite interesting to me. that's no inflation. we had an inflation report on the consumer deflators. 0.7%. i'm going to call that no inflation. mouf, here's where 50i78 going. commoditi -- now, here's where i'm going, commodities are falling. it's like a supply-side shot, a tax cut to the economy. that's the stuff of which better growth comes from. >> we should only hope, right?

and was should see better growth out of that. as the economy then starts to turn around, you see stabilization. you would like to see oil if it's coming under demand because there's growth that's positive sign. >> i think we're producing too much. >> there's a lot more than we ever had. >> so you wouldn't buy commodities. favorite pick, warren? >> i'm sticking with my financials right now. >> favorite -- >> industrials. industrials. infrastructure names that are going to benefit from this global turn around. >> all right. we'll leave it there. kenny polcari and warren myers. now, the democrats deliberately crafted obama care and i quote the chairman to say to screw over young people. that's reince priebus's words, not mine. that could be a question of blood flow. cialis tadalafil for daily use

helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial.

obama care is really hurting young people, young millennials like myself. for example, it went up to $1,800 a year, that's not sustainable. and it's not acceptable. >> all right. that was sophie miller one of our great college students from last night. she is seeing it, obama care is bad for young people and listen to what the head of the republican party reince priebus said on newsmax tv. >> the obama care package was designed to screw over young

people. it wasn't a mistake. this thing was not an accident. it was intentionally designed. obama care was intentionally designed to screw over young people. so that young people pay for everyone else's stuff. >> all right. i'm not exactly sure what he's moment, but we'll come back to our free market friday panel. tracy sefl, lenwood brooks and james pethokoukis. what does he mean, to screw over young people, how do you read that? >> i read it as a chairman of a party is a hard job. i know, i have worked for the party. >> he's having a bad day? >> maybe it was a bad day. i think he's a bit obsessed with the affordable care act and there's so many other things that he also said this week for example, he won't rule out another government shutdown. >> right. >> so chairman free us the, keep talking. >> what do you think he meant? >> it was the funding mechanism.

we want them to pay for everyone else and the unemployment rate is terrible. oh by the way when you get older you have to pay more taxes. >> lenwood, last word. >> i don't know exactly what he meant. but i'll deyou this, larry. you can't judge the obama care by what the -- the action by what's happening here. >> all right. thanks very much. i'm kudlow. what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪

♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy.

>> narrator: in this episode of "american greed: the fugitives"... meet joe mccool -- a man with promises and plans for other people's life savings. >> we could get 10% a month on our money. sounded awful high, but awfully good, too. >> narrator: he is accused of profiling his clients. >> the older you were, the more vulnerable you were, the more likely you were gonna become joe mccool's next target. >> narrator: but after the money runs out, mccool loses his cool. >> if he didn't like what you had to ask or say, he would hang up on you. >> narrator: and, finally, when no one is looking, joe mccool slips out of town. but first, in lexington, kentucky, jim hammes plays his role perfectly -- the hardworking family man. >> i thought, "wow, i hope i have a great husband like that